If you sell your own home and buy another one, you may have to deal with the additional credit regulation. This can have consequences for the deductible mortgage interest.
How does the additional credit regulation work?
If you sell your house, the amount you get for it is often higher than the mortgage on the house. This difference is called surplus value. Our government once thought that if you buy a new home within 3 years of selling your house, you have to put this surplus value into the new house. The remainder that you then need, you can borrow. The interest on this loan is deductible.
Do you borrow more? For example, because you have enjoyed life to the fullest and the surplus value has now partially or completely disappeared, then you may not deduct the interest on this higher part of the loan.
Example
The surplus value of the house you are selling is € 50,000. You buy a new home for € 400,000. The interest is deductible on a mortgage or loan of up to € 350,000. Do you borrow more than € 350,000? Then you may not deduct interest on the amount above € 350,000.
Tax partners
The surplus value is divided 50/50 if you have a tax partner. In case of a divorce this means that each of you must take half of the surplus value with you in a new home.
Required documents for the IB at the Bookie
If the additional credit regulation is involved, your Bookies will need extra documents:
- Notary bill for selling the previous house;
- Notary bill for purchasing the new house;
- Binding mortgage offer;
- In case of a new constructed house, the purchase deed;
- Invoices for any deductible costs such as appraisals and consultancy fees.
Please note that this may involve extra work, which will be charged. This is because it is not a simple calculation to make. Read more.